By Jennifer Srock
Short sales are not for everyone. Not only can they take 30 up to many months for the sellers’ bank(s) to approve or disapprove of the short sale but, should an approval be awarded; the purchase price and terms can also be changed.
If the asking price of a short sale seems to be unrealistic, this is because the seller may have an eminent foreclosure approaching. In order to stop the foreclosure, they MUST get a contract and submit a short sale package. More buyers are willing to attempt to purchase a short sale if the price is a screaming deal so, a seller may drop the asking price in hopes to get an offer to submit and postpone the foreclosure. This does not mean the seller’s bank has to approve it. With prices increasing, the seller’s bank may require market value pricing or close to. Some may call this a bait and switch but, a professional will explain the benefits to the buyer and make sure the buyer expects for the bank to come back wanting a more reasonable market price. You may get lucky and have the bank approve less than market value which may just be worth the risk of waiting to see. The bank may also decide to take a chance at getting a better deal after they foreclose on the seller and just not approve the short sale.
Every short sale is different and just because it was approved once doesn’t mean the process will be shortened or that it will get approved for the same amount and terms the second time around. Of course, this does happen in some cases. The point is to not assume all short sales are alike.
So long as you don’t have a time frame to be met, you have patience, and you are ok with the possibilities of negative outcomes, a short sale may be a good option for you.
It’s always a good idea to have finances in order prior to finding a home. In this market, however, it will be required to have proof of funds to make an offer. A seller will not consider an offer without it. If they decide to use a loan, I recommended my preferred lender in the previous email below but, I insist that if they do not use them that they use an AZ based loan officer because they will be familiar with the AZ contract terms and time frames that must be met.